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A Single Currency but Little Solidarity

October 26, 2003|Jeffrey Fleishman | Times Staff Writer

SAARLOUIS, Germany — On the streets of this town, as a clarinet player strolls through falling leaves, an au revoir is as likely to be heard as an auf Wiedersehen. Beer and cognac flow in harmony, and the bratwurst doesn't bow to the foie gras.

Saarlouis -- rising from the coal fields on the German-French border -- is a miniature of the European Union's plan for the continent. In fits and starts, and often amid clamorous protest, the union is attempting to integrate the countries of Europe and create an economic market to rival the U.S. while diminishing the nationalism that for centuries erupted in war and strife.

The euro, Europe's single currency, is a central piece in this grand scheme. Shared by 12 countries since the notes and coins were introduced in January 2002, the euro has powered some European stocks and spurred cross-border corporate deals.

For all that, the euro is hardly popular. It's little more than a convenience, some say, a symbol of unity at a time when the continent is unwilling to rally around other banners.

The atmosphere of European togetherness is a sort of big family wrestling match bristling with politics, egos and mixed results.

Britain, Denmark and Sweden, which belong to the 15-member EU, are refusing to join the European Monetary Union.

The troubled economies of France and Germany -- keys to the union's success -- are worrying industries across the continent.

Many capitals are slow to make the political and social changes necessary to connect the shopkeeper in Lisbon to the pretzel maker in Munich.

Recent acrimony in Brussels threatened the draft of a European constitution when large and small nations bickered over power sharing. Europe remains split over foreign policy, immigration, military pacts and globalization.

Underlying the persistent questions of unity are the more profound questions of identity. What exactly is a European? "Europeans are missing a common language," said Carl Jakob, manager of Pieper's department store in Saarlouis. "Our old cultures will not grow easily together. If you look to America, you see Russian, Chinese and Italian neighborhoods. But everyone identifies themselves as Americans. This was a new thing for the world. We don't have that new thing in Europe."

To gauge Europe's angst over its identity, one need only inquire about the euro.

'It's Only Irritated Us'

"The worst idea of all time," said Susanne Jacobi, who runs a wine shop in Saarlouis, a town name that begins with a German accent and ends with a giddy nasal French twist. "It was supposed to unify us, but it's only irritated us."

The euro has removed the burdens of foreign exchange rates for most Europeans, but it has not ignited widespread economic growth, and its high value against the dollar (one euro is worth $1.18) may hurt exports while pushing up European prices.

"We know it's nonsense to maintain such a high euro," said Marc Touati, an analyst at Natexis Banques Populaires in France. "It's a lack of economic realism. We are unable to control the euro value and we have a high euro when we need a low one."

Europeans concede that they do enjoy the convenience of a single currency.

There is also a sense that the euro bridges lingering World War II divides and counterbalances what many view as the dangerous policies of the U.S. Yet this new money, still crisp and shiny, has failed to ignite European solidarity.

"Now we don't have to exchange money when traveling in Europe," said Beatriz Diez Muino, an art teacher in Madrid. "But I don't feel more European or less Spanish because of the euro. The identity of the human being is deeper than that."

The convenience notwithstanding, consumers complain that -- despite low overall inflation -- the shift to the euro encouraged merchants to play tricks with the math and increase prices for Europe's 375 million people. In interviews across the continent, there is a feeling that somehow the worker and the pensioner have been cheated in a sleight of hand concocted by politicians and corporations.

"If you go to the grocery or vegetable shop, it's like going to the jewelers," said Gloria Molinaro, owner of a dry cleaner in Rome, where consumer groups have staged shopping strikes to protest the euro and an inflation rate that climbed to 2.8% for August. "The price increases have been ridiculous.... We should go back to the Italian lira because with the euro everyone is trying to rip us off."

Italian consumer organization Intesa claims the euro has brought "a wild and unchecked increase in prices which has drastically dented" purchasing power.

Tobacco and alcohol prices, for example, are up 7.3%. A glance at an Italian restaurant guide shows that a dinner in Villa Valentina outside Rome in 2001 cost 45,000 lire, or the equivalent of 23 euros. When the currency officially changed to the euro a year later, the price of that dinner nearly doubled to 40 euros.

Little Faith in the Euro

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